Saturday, July 31, 2010
The US government announced yesterday that economic growth in the USA has slowed to 2.4% in the second quarter as the economy struggles with high unemployment and the aftermath of the worst recession since the 1930’s.
This slower rate compares with a newly revised number of 3.7% for Q1, and 5% in Q4 of last year. Economists had been expecting economic growth of 2.5% for Q2.
For this year’s second quarter, the Bureau of Economic Analysis’ report on the economy carried more disappointing news. Consumer spending growth in the North American country slowed from 1.99% in Q1 to just 1.6%. Also, businesses and retailers stocked shelves at a slower pace, and America’s trade deficit, the largest in the world, widened as the country imported more goods.
The US Commerce Department also revised some of their estimated economic growth statistics. The Department revised their estimate of Q1 economic growth from 2.7% to 3.7%, and also revised their estimate of the severity of the 2007–2009 recession from a real-GDP contraction of 2.5% to an new figure of 2.8%. Also, there were some economic bright spots in Q2. State and local governments, who have been cutting spending for months, spent 1.3% more than in Q1. Residential investment grew 27.9% from ?12.3% in Q1. Nonresidential building investment rose for the first time in two years, and disposable personal incomes rose 4.4%, though it appears that people are not spending it.